In California, as in many states, a bill expanding the 340B program — AB 1460 — was causing deep concerns among patients and patient advocacy groups. The Chronic Care Policy Alliance (CCPA) and its partners stepped up to call for amending the bill to avoid the continued misuse of 340B funds. We were successful in stopping the bill for 2025. This does not preclude the bill from moving forward in 2026.
CCPA and its partners believed that AB 1460, as drafted, did not align with the mission of the federal 340B Drug Pricing Program. The original intent of the 340B program was clear. It was created to help safety-net providers “stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.”
However, over the years, a growing share of 340B revenue has been captured by large, for-profit pharmacy chains and PBM-affiliated entities, preventing funding from flowing for indigent care. As currently drafted, AB 1460 would allow for the unlimited use of contract pharmacies, essentially lining the pockets of large health corporations rather than providing direct patient benefit.
The 340B contract pharmacy market has become highly concentrated and dominated by a handful of multi-billion-dollar, for-profit pharmacy chains and PBMs who now account for 76% of all 340B contract pharmacy relationships. This concentration has enabled corporate behemoths to capture a growing share of 340B revenue, at the expense of the program’s original mission.
Community clinics, hospitals, and rural health providers depend on 340B savings to keep their doors open, expand services, and cover gaps in care for uninsured and low-income patients. Yet, under the current structure, these safety-net providers are forced to share an increasing portion of their limited 340B savings with middlemen. A 2024 report by the U.S. Senate HELP Committee highlighted that fees assessed by PBMs and third-party administrators in the 340B program are often opaque, complex, and increasing, with little public accountability for how these fees are structured or how much is ultimately retained by PBMs and Third-Party Administrators versus passed on to clinics or patients.
This model siphons dollars away from where they are most needed and into the pockets of multi-billion-dollar corporations. To truly protect California’s most vulnerable patients and preserve the integrity of the 340B program, CCPA requested that AB 1460 be amended to limit PBM-owned contract pharmacies to only reasonable dispensing fees, ensuring that all remaining 340B revenue supports direct patient care.
These amendments have yet to make it into the bill. We are concerned that AB 1460 may return in 2026 and similar efforts may be undertaken in other states. Absent the proposed amendments, AB 1460 will further entrench profit-driven middlemen in the 340B program and widen disparities between urban and rural health systems. By placing commonsense guardrails on what contract pharmacies can extract from 340B transactions, AB 1460 can be a powerful tool for equity by helping clinics expand services, retain staff, and serve more patients, especially in underserved and rural communities.
CCPA has been educating the public on concerns with the 340B program for several years, and is grateful the California Legislature decided to pause the measure at this time.
We ask that you be vigilant for this bill and related measures in 2026 and join with us in the fight to ensure patients receive the care they need through the 340B program.
Resources:
- AB 1460 CCPA OUA 6.17.25_Final (2)
- CCPA Priority Issues – 340B – How the 340B Drug Pricing Program Impacts Patients
References:
- The 340B Contract Pharmacy Market in 2025: Big Chains and PBMs Tighten Their Grip
- Senate HELP Committee Majority Staff Report on the 340B Drug Pricing Program